In an aggregate demand function is given by AD = rs 200 cr + .75y . The full employment level of income is rs 500cr. calculate the decrease in investment required to combat inflationary gap in the economy.

Dear student
as it is given its a situation of excess demand, still at this point AD = AS(Y), And Y IS GIVEN = RS 500 CRORE
AD = rs 200 cr + 0.75 Y
AD = AS
200 + 0.75 Y = 500
0.75 Y = 500 -200
0.75 Y = 300
Y = 300/0.75
Y = 400 CRORES
EQULIBRIUM LEVEL OF INCOME IS RS 400 CRORE
k (multilpier ) = 1 / (1-MPC)
HERE, MPC is 0.75
s0, k = 1 / (1 - 0.75)
         = 1 / 0.25
       = 4
k = change in income / change in investment
4 = (500 -400) / chamge in investment
4 = 100 / change in investment
change in investment = 100 / 4
change in investment = 25 crores
if we decrease the investment of rs25 crore, we will arrive at equilibrium of national income which is rs 400 crore.
and there will be no inflationary gap.
Regards